The stock market is 70% overvalued … crash now inevitable

Tuesday, September 27, 2016
By Paul Martin

by: J. D. Heyes
Tuesday, September 27, 2016

Author Charles Dickens’ classic, A Tale of Two Cities, begins this way: “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness … .”

According to one stock market analytical firm, GMO, today’s market behavior resembles Dickens’ book, which was published in 1859 and was set during the time of the French Revolution some seven decades earlier.

As the firm noted, in recent days much of the investing and financial world was focused on a meeting in Jackson Hole, Wyoming, attended by Federal Reserve chairperson Janet Yellen. But GMO analysts were watching other things and events happening in the market.

In August, the firm noted in its monthly report – reproduced in part by Zero Hedge – that Shiller P/E, a respected metric for measuring U.S. equities valuation, surpassed 27. Given that normally its range is somewhere slightly above 16, it appears that valuations are looking a bit larger than they should be.

What’s more, GMO noted, the last time the Shiller P/E was above 27 was in October 2007, “and we all know how that movie ended,” the GMO report said.

‘A tale of mediocrity, at best’

The Rest…HERE

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